Where Are The CDMA Smartphones?

[Kris Kumar]

CDMA vs GSM has been heavily debated on our site in a lot of threads. And almost always the final analysis seems to favor the CDMA camp. I recently read an article in a magazine which described CDMA as a technology superior to GSM, and as a platform that can accommodate future growth in voice and data services. It offers better voice quality, lesser chance for call drops, can accommodate more subscribers per channel, increased security and offers higher data rates. It promises easier and cheaper upgrades to future iterations. CDMA supporters claim that the subscriber count is growing at a faster rate than GSM subscribers.

The only two things going for the GSM lovers are that it enables global roaming and allows users to swap handsets or transfer their number from one phone to another easily. And also that it has the largest installed base, both in terms of coverage and subscribers. Of course, the future versions of GSM I am told will have better performance. But the CDMA camp compares the CDMA vs GSM war to over-clocking 486 processor vs Pentium, where 486 processor is GSM technology.

How come all the Smartphones are for the GSM platform? Why is that the only CDMA phone we have is Samsung i600 (that too running Smartphone 2002)? Where is its heir? Sprint selected Samsung i600 for its foray into the Smartphone world, does that mean there are no other CDMA models planned for this year? Motorola did state at Mobile Developer Conference in March this year, that it will develop CDMA versions, but we have not heard any formal plans. In US, CDMA networks have more subscribers than GSM, yet the GSM folks have more options.

Why are the manufacturers overlooking this market segment?

[aristoBrat]

The only two things going for the GSM lovers are that it enables global roaming and allows users to swap handsets or transfer their number from one phone to another easily.
I'd count "price" as another thing going for GSM.

On average, US GSM carriers seem to offer less expensive voice and data plans compared to US CDMA.

Same for equipment cost. I was able to IMPORT a brand-new GSM Windows Mobile Smartphone FROM THE UK for $100 less than I paid for my CDMA i600 on Verizon (and that was with a 2-year contract discount!)

Hopefully as the CDMA subscriber count grows, equipment options will increase and prices will decrease.

[Mr.Phil]

I suspect it has more to do with the mobile markets. On average, EMEA country (mostly GSM) subscribers replace their mobiles much more frequently, and have a higher tendency to buy higher end units. Also if you look at global handset numbers, GSM mobile subscriptions still command a vast majority of the market share.

[Kris Kumar]

Price is a plus point for GSM, at least in US. And also GSM enables you to dump one carrier and carry your expensive phone over to the competing one.

But price in general is more of a marketing strategy. In US, the GSM networks lag behind the CDMA ones in terms of coverage and also subscriber count, so the GSM carriers give out huge discounts on new phones, and low rates. Now lets shift our focus to India, over there GSM networks have established themselves and CDMA is trying to claim a foothold. There the CDMA folks give free phones (or discounts) and also low rates. And the pricing strategy is working, both in US and in India.

[Kris Kumar]

I suspect it has more to do with the mobile markets...and have a higher tendency to buy higher end units...

It's true that GSM markets are more established and hence lucrative. But in US, the corporate America buys a lot of PDA style devices (read BlackBerries), and CDMA has the best coverage, not to mention the fastest data networks. Doesn't the combination appeal to the Smartphone manufacturers to pursue CDMA?

But have to admit, there is one flaw in my analysis of the US corporate market. The companies using BlackBerry will find it hard to switch another email push technology. And have to state that the Microsoft ActiveSync/Exchange implementation is not liked by the corporate America. But I wonder if the manufacturers are factoring in this flaw when deciding to stay out of this segment.

[aristoBrat]

It's true that GSM markets are more established and hence lucrative. But in US, the corporate America buys a lot of PDA style devices (read BlackBerries), and CDMA has the best coverage, not to mention the fastest data networks. Doesn't the combination appeal to the Smartphone manufacturers to pursue CDMA?
FWIW, working for $3B/yr corporation, we have both CDMA and GSM PPCPEs. Users of both groups travel regularly (their PPCPE replaces their laptop), and we've not had any "coverage" complaints from the GSM folks.

[aristoBrat]

It's true that GSM markets are more established and hence lucrative. But in US, the corporate America buys a lot of PDA style devices (read BlackBerries), and CDMA has the best coverage, not to mention the fastest data networks. Doesn't the combination appeal to the Smartphone manufacturers to pursue CDMA?
Our CEO was always complaining about how long it took to replicate his PPCPE over GPRS, so we gave him a GPRS Blackberry. He won't shut up about how much faster the Blackberry is. GPRS obviously didn't speed up, but the fact that he doesn't have to click on "replicate" and watch a progress bar slowly update makes it seem like it did. Push email, to some extent, hides the "fastness" of the data network.

FWIW, our company is waiting for the "Blackberry Connect" client software that will let PPCPE and WM Smartphones sync PIM info with a BES server. Once that's out, there's no reason for companys to feel "stuck" with a Blackberry infrastructure (that prevents them from rolling out PPCPEs or Smartphones).

[thetruth]

And what are we to make of new chipsets that support both gsm and cdma?

(ie, http://www.cdmatech.com/solutions/products/msm7600_chipset_solution.jsp)

Are future smartphones going to support both networks and finally give CDMA users the ability to have worldwide coverage? I hope so.

I'm curious what ideas are floating around as a solution to merging sim card and esn down the road. Will CDMA switch? Can CDMA switch? I bet Vodaphone is strategizing(sp? word?) since they have such a vested interest in VZ.

Sorry, slightly topic...

[Kris Kumar]

Our CEO was always complaining about how long it took to replicate his PPCPE over GPRS, so we gave him a GPRS Blackberry. He won't shut up about how much faster the Blackberry is. GPRS obviously didn't speed up, but the fact that he doesn't have to click on "replicate" and watch a progress bar slowly update makes it seem like it did. Push email, to some extent, hides the "fastness" of the data network.

That's what I like about BB. The excellent push implementation gives a superior user experience.

FWIW, our company is waiting for the "Blackberry Connect" client software that will let PPCPE and WM Smartphones sync PIM info with a BES server. Once that's out, there's no reason for companys to feel "stuck" with a Blackberry infrastructure (that prevents them from rolling out PPCPEs or Smartphones).

I am waiting for it too. I will then be able to use my Smartphone on our corporate BB server. Also the Smartphone market will get energized when BB connect is launched, at least I hope so.

[rbrome]

...[CDMA is] a platform that can accommodate future growth in voice and data services. ... [CDMA] can accommodate more subscribers per channel, increased security and offers higher data rates. It promises easier and cheaper upgrades to future iterations.

All very true.

...[CDMA] offers better voice quality, lesser chance for call drops,

I strongly disagree on voice quality. In my experience with many, many phones, GSM consistently sounds better - on both ends. Dropped calls is debateable.

The only two things going for the GSM lovers are that it enables global roaming and allows users to swap handsets or transfer their number from one phone to another easily.

For plenty of people, those are pretty important. I wouldn't just casually dismiss those people by calling them "GSM lovers". I don't feel any particular love for GSM, but I do enjoy traveling overseas, while enjoying seamless voice and data. Being reachable at my own number and moblogging while overseas happen to be important to me.

I also enjoy my Smartphone some of the time, but a smaller phone at other times.

And also that [GSM] has the largest installed base, both in terms of coverage and subscribers.

Yep, and by a huge margin, too. There are over a billion GSM users worldwide - 73% of the market. Between March 2003 and March 2004, there were over 215.3 million new GSM users worldwide, more than the 202 million total CDMA users worldwide.

Of course, the future versions of GSM I am told will have better performance.

Not really. EDGE and AMR together are the last updates for GSM, and they only bring it on par with CDMA 1xRTT. To compete with CDMA EV-DO and EV-DV, GSM is essentially being abandoned in favor of WCDMA technology.

In US, CDMA networks have more subscribers than GSM, ...

Not by as much as some might think, though. Look at the top five carriers:

CDMA:
Verizon: 37.5 million users
Sprint: 15.9 million
TOTAL: 53.4 million

GSM:
Cingular: 24 million
AT&T Wireless: 22 million
T-Mobile: 13.1 million
TOTAL: 59.1 million

So of the top-five national carriers, the GSM carriers together are bigger.

But, two things do offset that:

1. Cingular and AT&T still have a lot of TDMA users, although that situation is temporary as TDMA is quickly being phased out.

2. The #7 and #8 carriers, (Alltel and US Cellular, both regional,) are both CDMA and bring the total above the GSM figure. Alltel has 8 miliion CDMA users and US Cellular is 4.4 million strong.

Still, GSM is now very strong throughout the Americas. CDMA doesn't dominate the market like it used to.

[aristoBrat]

<looks around for ShivShanks> :D

[Don Sorcinelli]

There are over a billion GSM users worldwide - 73% of the market. Between March 2003 and March 2004, there were over 215.3 million new GSM users worldwide, more than the 202 million total CDMA users worldwide.
This may very well be the most important fact in answering the "Where are the CDMA Smartphones?" question. For most device manufacturers, it all comes down to cold, hard business analysis.

If I am strictly a GSM manufacturer, the simple cost of implementation for manufacturing can be quite high; this doesn't include the cost of licensing of OS bits. There then has to be the analysis of ROI. Compare that to taking the money and investing it into new GSM products / production that can be sold to a wider audience, and it becomes a hard sell.

For those who already produce CDMA products, it becomes more of a risk management assessment. Here, you are factoring in the potential that R&D investments and licensing could go for naught if the CDMA carriers don't "buy in" (figuratively and literally). It does not surprise me that some of the manufacturers are a little hesitant because of this.

I tend to believe that there has to be at least one CDMA manufacturer who produces a CDMA Smartphone that proves to be highly successful in the North American market. Then there will be the precedent that provides justification to the others. Until then, CDMA Smartphones will be "fringe element".

[Kris Kumar]

For plenty of people, those are pretty important. I wouldn't just casually dismiss those people by calling them "GSM lovers". I don't feel any particular love for GSM, but I do enjoy traveling overseas, while enjoying seamless voice and data. Being reachable at my own number and moblogging while overseas happen to be important to me.

I am one of them, the so called "GSM Lovers" :) GSM roaming has always helped me on my trips abroad. That was the reason I had chosen GSM.

Not by as much as some might think, though. Look at the top five carriers:

CDMA:
Verizon: 37.5 million users
Sprint: 15.9 million
TOTAL: 53.4 million

GSM:
Cingular: 24 million
AT&T Wireless: 22 million
T-Mobile: 13.1 million
TOTAL: 59.1 million

So of the top-five national carriers, the GSM carriers together are bigger.

But, two things do offset that:

1. Cingular and AT&T still have a lot of TDMA users, although that situation is temporary as TDMA is quickly being phased out.

2. The #7 and #8 carriers, (Alltel and US Cellular, both regional,) are both CDMA and bring the total above the GSM figure. Alltel has 8 miliion CDMA users and US Cellular is 4.4 million strong.

Still, GSM is now very strong throughout the Americas. CDMA doesn't dominate the market like it used to.

Nice stats. Thanks.

Glad to know that GSM is becoming stronger in the States. Also, the recent AT&T-Cingular merger and roaming agreement between AT&T and T-Mobile, will make it stronger.

[Kris Kumar]

<looks around for ShivShanks> :D

:-)

I guess backup is needed...

[Kris Kumar]

There are over a billion GSM users worldwide - 73% of the market. Between March 2003 and March 2004, there were over 215.3 million new GSM users worldwide, more than the 202 million total CDMA users worldwide.
This may very well be the most important fact in answering the "Where are the CDMA Smartphones?" question. For most device manufacturers, it all comes down to cold, hard business analysis.

I can see that the 'Current' subscriber figures will lead the manufacturers towards GSM as the 'Entry Market'.

But its been over a year since Smartphones have been introduced. And has good success. And its time for the manufacturers to focus on the emerging markets, i.e. expand.

Isn't CDMA the future? Doesn't CDMA sound like the best partner for the Smartphones?

[aristoBrat]

Isn't CDMA the future? Doesn't CDMA sound like the best partner for the Smartphones?
So far, the CDMA manufacturers don't appear to think so.

And if the relatively-new CDMA Smartphone market turns out to be like the more established CDMA Pocket PC Phone Edition market, ... I wouldn't expect to see too much innovation.

Hopefully this will change as CDMA continues to grow...

[Don Sorcinelli]

There are over a billion GSM users worldwide - 73% of the market. Between March 2003 and March 2004, there were over 215.3 million new GSM users worldwide, more than the 202 million total CDMA users worldwide.
This may very well be the most important fact in answering the "Where are the CDMA Smartphones?" question. For most device manufacturers, it all comes down to cold, hard business analysis.

I can see that the 'Current' subscriber figures will lead the manufacturers towards GSM as the 'Entry Market'.

But its been over a year since Smartphones have been introduced. And has good success. And its time for the manufacturers to focus on the emerging markets, i.e. expand.

Isn't CDMA the future? Doesn't CDMA sound like the best partner for the Smartphones?

Kris,

I actually agree with you on these observations. The problem lies in the fact that we don't necessarily think like the device manufacturers do, and we don't have to deal with their issues.

Having talked to and worked with the ODMs at various times in the past, I do have to sympathize to some extent when it comes to the North American carrier market (where the bulk of CDMA activity occurs). Making a device that no CDMA carrier will stock is a big risk. Unfortunately, its not like GSM, where you could still sell an unlocked device through other retail channels if no carrier will pick the device up (BTW - this is still my main reason for using GSM). Thanks to the architecture of CDMA, an ODM is completely at the mercy of carrier acceptance.

Smartphones have been on the market for a while now. It seems as though someone has to sell the Verizons and Sprints on the viability enough to make them ask the ODMs to invest in production. Until then, the ODMs will be hesitant at best.

DonS

[Kris Kumar]

Having talked to and worked with the ODMs at various times in the past, I do have to sympathize to some extent when it comes to the North American carrier market (where the bulk of CDMA activity occurs). Making a device that no CDMA carrier will stock is a big risk. Unfortunately, its not like GSM, where you could still sell an unlocked device through other retail channels if no carrier will pick the device up (BTW - this is still my main reason for using GSM). Thanks to the architecture of CDMA, an ODM is completely at the mercy of carrier acceptance.

This definitely answers my question, as to why there are no CDMA Smartphones.

Its sad that unlike other consumer markets where the manufacturers deliver what the consumers need. In the cellphone arena, manufacturers and consumers are at the mercy of the middle-men called the carriers.

Not only do they prevent the release of new hardware but also software updates :-(

The thing that worries me is that if the carriers end up using Samsung i600 as the benchmark for the success of Smartphones in the CDMA world or North America, then we, the consumers, are doomed. I have nothing against i600, it is a good phone, but it has shortcomings, some of it can be rectified via software and some only through a hardware update.

[arnage2]

at least cdma has the treo 600, and many camera phones. Nextels iden doesnt even have a cameraphone yet

[Kris Kumar]

Ah ha! A topic for my next post "Where are the iDEN Smartphones?" ;-)

Well I guess we have figured out through this thread that the phone manufacturers:
a. Don't care about the subscriber population or subscriber needs.
b. They see how many carriers are there per technology (CDMA, GSM, iDEN). GSM wins hands down in this category.
c. Carriers have the final say, especially the ones who are CDMA and iDEN can be very picky.

Competition is good! GSM has a lot of carrier competition and the customer is the winner.

[Don Sorcinelli]

Ah ha! A topic for my next post "Where are the iDEN Smartphones?" ;-)

Well I guess we have figured out through this thread that the phone manufacturers:
a. Don't care about the subscriber population or subscriber needs.
b. They see how many carriers are there per technology (CDMA, GSM, iDEN). GSM wins hands down in this category.
c. Carriers have the final say, especially the ones who are CDMA and iDEN can be very picky.

Competition is good! GSM has a lot of carrier competition and the customer is the winner.
Kris,

On Point "a" - I wouldn't say that the manufacturers don't care about the subscriber population or needs. They do, and obviously use that for a part of their strategy. It's just that without carrier acceptance, all of that goes for naught.

On point "b" - For most manufacturers, yes, but it is the total potential audience per technology (GSM, CDMA, iDEN) that helps determine whether or not to get into the business. Outside of NA, CDMA is extremely limited. It ends up being a simple numbers/statistics game.

On Point "c" - absolutely. This is the thing that ends up hurting "cutting-edge" consumers the most. If you look at my comments on the The Future May Be In Jeopardy For The MPx And MPx100 (http://www.smartphonethoughts.com/forums/viewtopic.php?p=39400&sid=6756f4ec3883f1e3d158d8245e61210e) post, the whole support thing and its impact on ARPU make the carriers hesitant to pick up the devices, regardless of it being GSM, CDMA or iDEN. All in all, its really frustrating.

Like I said before - The main reason I went GSM was to be able to purchase phones outside of the control of carriers. If I waited for any carrier here in the US to sell what I wanted, I'd still be sitting around and staring at the wall :roll:

DonS

[aristoBrat]

Well I guess we have figured out through this thread that the phone manufacturers:
a. Don't care about the subscriber population or subscriber needs.
Actually, didn't we figure out that phone manufacturers TOTALLY care about subscriber population? They seem to be designing for the subscribers that have the most population. :D

[Kris Kumar]

And what are we to make of new chipsets that support both gsm and cdma?

(ie, http://www.cdmatech.com/solutions/products/msm7600_chipset_solution.jsp)

Are future smartphones going to support both networks and finally give CDMA users the ability to have worldwide coverage? I hope so.

I'm curious what ideas are floating around as a solution to merging sim card and esn down the road. Will CDMA switch? Can CDMA switch? I bet Vodaphone is strategizing(sp? word?) since they have such a vested interest in VZ.

Sorry, slightly topic...

Well Sprint has announced the launch of first Dual Band (CDMA/GSM) phone on its network.

http://www.sprintpcsinfo.com/modules.php?name=News&file=article&sid=536
Look for "Samsung World Phone", Launch Q4 2004.

But the Smartphone world will have to wait for I dont know how long before it becomes available. Look at my earlier post (http://www.smartphonethoughts.com/forums/viewtopic.php?t=5535) on this topic. Eventhough the "Smartphone+Dual Mode= Powerful Global Roaming solution" is compelling, the market demographics/size, I guess, doesn't make it compelling for the manufacturers and carriers.